Lufthansa may acquire a stake in the Italian airline ITA Airways
The Lufthansa is allowed to join forces with Italian airline ITA Airways. The EU Commission in Brussels gave the green light for the first step towards a potential takeover on Wednesday, but outlined a series of conditions that "fully address the competition concerns of the Commission." The EU competition watchdogs had suspected that a merger could reduce competition on certain routes and lead to higher prices.
According to the Commission's assessment, Lufthansa and ITA Airways were "strong and close competitors" on certain routes originating in Italy. This primarily concerns short-haul flights between Italy and central European countries. The two companies have reportedly faced competition from low-cost carriers like Ryanair, which often operate from less busy airports.
The Lufthansa and the Italian state, as the current owner of ITA Airways, have now committed to providing one or two competing airlines with the necessary funds to offer direct flights between Rome or Milan and central European airports. ITA Airways must therefore give up take-off and landing permits at Milan Linate Airport.
This prevents ITA from gaining a "dominant position" in Milan, the Commission added. Additionally, ITA Airways must swap attractive take-off and landing slots on long-haul flights from Italy to North America with its competitors. According to Brussels, this could lead to a greater offering of direct flights on several routes.
- The EU Commission's conditions for allowing Lufthansa to merge with ITA Airways include requiring Lufthansa to provide financial support to at least one other airline, enabling direct flights between Rome or Milan and central European airports.
- Despite the potential merger, Lufthansa and ITA Airways will continue to face competition from low-cost carriers like Ryanair on certain routes, as they often operate from less busy airports.
- In order to address competition concerns, the EU Commission stipulates that ITA Airways must relinquish take-off and landing permits at Milan Linate Airport and swap attractive slots on long-haul flights from Italy to North America with its competitors.
